The ledger of Hixson Company at the end of the current year shows Accounts
Receivable $120,000, Sales $840,000, and Sales Returns and Allowances $30,000.
Journalize entries related to
Accounts receivable.
(SO 2)
Journalize entries to record
Allowance for doubtful accounts
Using two different bases.
(SO 3)
Instructions
(a) If Hixson uses the direct write-off method to account for uncollectible accounts, journalize
The adjusting entry at December 31, assuming Hixson determines that Fell’s $1,400 balance
Is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize
The adjusting entry at December 31, assuming bad debts are expected to be (1) 1% of
Net sales, and (2) 10% of accounts receivable.
(c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize
The adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75% of
Net sales and (2) 6% of accounts receivable.